Canadian Cannabis Leadership Summit 2024 in Ottawa

by Grow Up Conference | Sep 20, 2024 | Media Partners, Stratcann

The Cannabis Council of Canada (C3) is hosting its Canadian Cannabis Leadership Summit 2024 in Ottawa on Wednesday, October 1. 

The half-day event will take place at the National Arts Center (NAC) in Ottawa near Parliament Hill, with four panels from 1:00-5:00 pm focussed on issues facing the industry.

Those panels will include an in-depth conversation about the excise duty and its impacts on the industry, with C3 calling for a 10% ad valorem rate to replace the $1 a gram rate. A second panel will explore the need for a single national excise stamp. The third and fourth panels will focus on reducing the overall regulatory burden and the need for industry to come up with a standard “unit” of THC. 

C3 president Paul McCarthy, who has been busy reinvigorating the organization since taking on the position in April, says he’s bringing together topics and speakers that reflect the most pressing issues the industry currently faces.

“There are a number of goals associated with this conference. I think it is important to establish the Canadian Cannabis Council not just as a trusted voice in this industry but as the trusted voice. To do that, we need to be leading the conversation, and doing so in a responsible and credible manner. That requires taking on the tough issues by bringing together the leading experts, be it in cannabis, mental health, finance, or whatever discipline is needed. That is how you advance the conversation. And if you look at our panels, you’ll see precisely that.”

Speakers include Beena Goldenberg, CEO, Organigram; Orville Bovenschen, President, Pure Sunfarms; David Lobo, CEO, Ontario Cannabis Store; Dr. Mark Ware, Director, Allan Edwards Pain Management Unit; Gillian Schauer, Executive Director, US Cannabis Regulators Association; and, Barry Katzman, Managing Director, Peak Processing.

“Job number one,” continues McCarthy, “is about the financial viability of licensed producers. That is why two of the four panels we are hosting are on the excise duty rate and the excise stamp. These represent our top two issues. We want to bring these conversations to the doorstep of Parliament so that there is broader awareness and understanding and so that everyone is clear on what we are asking for.”

McCarthy says he has plans for C3 to host more events of this kind in the next year. Keeping events like this to just a few panels not only reflects the busy nature of the industry, he explains, but also recognizes that the politicians and policymakers they are also speaking with have busy schedules and many competing priorities.

“We are hosting this over an afternoon because we feel that’s the most effective way to do it: be laser-focused on the top priorities. You cover less width but get more depth. And then people are really clear about what is important to you and why. Of course, in this instance, change to the excise tax is imperative if we are to have financial viability for licensed producers. It’s the top issue by far.”

More information on the Canadian Cannabis Leadership Conference is available here.

Tokyo Smoke begins Stalking Horse sale process

by Grow Up Conference | Sep 19, 2024 | Media Partners, Stratcann

Tokyo Smoke has now entered into a share subscription agreement with its parent company, pursuant to which the parent company, TS Investments Corp., will acquire all of the issued and outstanding shares of Tokyo Smoke. 

A judge endorsed the agreement on September 18 and announced by Tokyo Smoke on September 19. The purchase price is around $77 million, and the buyer is obliged to take on certain liabilities of Tokyo Smoke. 

As part of the stalking horse agreement, Tokyo Smoke was also approved to restructure its previously announced CCAA process from August. This will allow Tokyo Smoke to open the sale and investment solicitation process (SISP).

The Company has obtained approval from the Court in its restructuring proceedings commenced under the Companies’ Creditors Arrangement Act (the “CCAA“) to implement a sale and investment solicitation process (the “Sale Process“) to seek interest in and opportunities for a sale, restructuring, recapitalization or other form of reorganization of the Company’s business for a purchase price above the purchase price being offered by the TS Investments Corp under the stalking horse agreement. TS Investments Corp is Tokyo Smoke’s sole shareholder. 

Interested bidders can participate in the two-phase sales process beginning September 20, 2024. The first phase has a goal to solicit non-binding letters of interest. The deadline to submit letters of interest compliant with the sale process terms is 5:00 pm Eastern Time on October 21, 2024. The second phase will seek binding agreements from compliant parties, with bids to be submitted by 5:00 pm Eastern Time on November 11, 2024.

The consummation of any bid, including the bid submitted by the Buyer under the Stalking Horse Agreement, is subject to closing conditions that are customary for transactions of this nature under the CCAA, including compliance with the applicable bidding procedures and approval of the Court.

Tokyo Smoke notes that it began the restructuring proceedings under the CCAA in order to align its operations with current market and regulatory conditions, which it says have changed significantly since the initial licensing regimes were introduced. Tokyo Smoke intends to exit from CCAA protection as a stronger business, better positioned to continue providing premium products to its customers over the long term while continuing to provide jobs to its dedicated employees across Canada.

Toko Smoke’s monitor in the process, Alvarez and Marsal, will post on its website, as soon as practicable, any modification, amendment, variation or supplement to the bidding procedures and inform the bidders impacted by such modifications.

An updated service list posted on September 17 includes Canopy Growth, National Cannabis Distribution, Health Canada, Canada Revenue Agency, the Attorney General of Canada, Ontario Ministry of Finance, the AGCO, Alberta Ministry of Justice, the government of Newfoundland and Labrador, the Manitoba LGCA, the government of Manitoba Department of Finance and Taxation Division, the SLGA, and Saskatchewan Finance. 

A list of Tokyo Smoke’s creditors from August 30 shows more than $94 million owed to secure and unsecured creditors. 

Arbitrator rules cannabis detection was not impairment

by Grow Up Conference | Sep 19, 2024 | Media Partners, Stratcann

A federal arbitrator recently ruled that a train engineer who was found to have had cannabis in his system did not need to face penalties because he was not impaired.

The locomotive engineer from Saskatchewan tested positive for THC in a urinalysis conducted on March 30, 2022, after an incident where the engineer had failed to secure his train. 

Although an oral swab and breathalyser were both negative, urinalysis showed that he was positive for cannabis metabolites (53 ng/ml). 

The man’s union brought the grievance to arbitration, arguing that since the man was not found to have been impaired, a penalty of a thirty-day suspension and six months of random on-the-job testing was uncalled for. 

The company, Canadian Pacific Kansas City, argued that the random testing is appropriate for safety reasons, given the dangerous nature of the work, even if no discipline is imposed.

The man told company investigators at the time of testing that he had consumed a cannabis candy some 16.5 hours before his tour of duty.

In his analysis, the arbitrator noted that urinalysis has “repeatedly been found by arbitrators to be incapable of assessing when or in what quantity drugs were consumed, and whether the employee was impaired.” Because of this and because the engineer, who had 28 years of seniority at the time of the incident, showed no signs of impairment, the arbitrator found him not to have been impaired. 

As such, in a ruling posted on September 16, federal arbitrator James Cameron ruled that the thirty-day suspension be struck down, with the employee compensated for lost time. He also found that the six months of random testing was not warranted since he was not impaired and was, therefore, not in violation of company policy. 

Another ruling, posted on the same day by the same arbitrator, ruled that a subsequent termination of the same employee who had been found to have alcohol in his system following testing conducted under the initial six-month random sampling penalty was uncalled for.

The locomotive Engineer, John Downey of Sutherland, SK, was dismissed from service by Canadian Pacific Kansas City on January 28, 2023, after testing positive for alcohol on December 5, 2022. 

The man’s union argued that he was not actually impaired at the time of testing, nor had he intentionally violated company policy by consuming alcohol nearly a full day prior to his shift. 

Downy told company investigators at the time of his random sampling that he had consumed alcohol around 20 hours before the start of his next shift, accounting for the breath alcohol content screening at 0.051% Blood Alcohol Content and subsequent lab confirmation positive at 0.046% BAC.

Company policy based on his previous suspension and six months of random testing was that Downy could not consume any intoxicating substances during the six-month period. He and his union contend that Downy thought the only substance covered in this ban was cannabis. 

The company argued that Downy was subject to duty in the day prior to the shift where he tested positive for alcohol because he was on call. The union successfully argued that he was not subject to duty at the time and, therefore, should have his position reinstated and made whole for the loss of wages and benefits, minus mitigation.